How to Hold a Meeting

Q: I'm looking for some help on
the proper procedure or protocol for holding corporate meetings and
keeping minutes. Do you have any information you can offer?

A: Most business owners like to
focus on improving products or services, snagging capital in the
next round of financing and developing a growth strategy. Besides
these big-picture items, however, there are details you can't
ignore if you want to keep your business in line with state laws
and back up your tax returns.

The "corporate paperwork" you need to be aware of
includes meetings and minutes. The details for how and when to
handle these are somewhere in your state's business statute, so
take a few minutes to look them up. (Try www.findlaw.com or
www.uslaw.com.)
They should also be in your bylaws, which contain specifics of how
your company is run. Although corporate law varies from state to
state, there are some basics that apply across the board:

Annual shareholders meeting. Once you have a quorum
(minimum needed to hold a meeting), shareholders elect directors
and conduct any other business on the agenda. In most states, you
don't have to have an actual meeting if all shareholders agree
to the action by unanimous written consent. A shareholder who
can't be there can give a proxy (permission to vote) to another
shareholder.

Annual directors meeting. As with the shareholders
meeting, this can be conducted by unanimous written consent rather
than through a physical meeting. Directors nominate and elect
officers, deal with officer pay and do whatever else needs
doing.

Special meetings. These can be held by either
shareholders or directors to deal with specific issues (for
example, borrowing money or selling assets). The proposed action is
contained in a "resolution." Again, shareholders or
directors can give unanimous written consent to an action instead
of meeting.

Minutes. These are a record of what actions were taken
on behalf of the corporation. They're taken by the secretary,
approved by the shareholders and filed with the corporate records.
Minutes record who was at a meeting, who presided, where and when
the meeting was held, and what business was done. Sample minutes
are available in many form books. Typical events recorded in
minutes include things like mergers and the sale or purchase of
corporate assets.

Because most entrepreneurs rank paperwork right up there with
scouring the coffee pot on the list of things they'd like to do
with their workday, help has arrived. You can buy corporate
"kits" containing everything from a corporate seal to
share certificates and minutes paper.

Meetings and minutes may seem annoying, but they're just
part of record-keeping. Learning the basics and following
formalities will keep your business out of trouble and document
just how your brilliant officers and directors made all that
money.

Joan E. Lisante is an attorney and freelance writer who lives
in the Washington, DC, area. She writes consumer-related legal
features for The Washington Post, the Plain Dealer,
the Spokane Spokesman-Review and the Toledo Blade
(Ohio). She is also a contributing editor to LawStreet.com and
ConsumerAffairs.com. In her practice, Lisante is
counsel to ConsumerAffairs.com and was counsel for Zapnews, a
fax-based customized news service for radio stations. Previously,
she served as Assistant District Attorney in Queens County, New
York, and Deputy District Attorney in Nassau County, New
York.

The opinions expressed in this column are
those of the author, not of Entrepreneur.com. All answers are
intended to be general in nature, without regard to specific
geographical areas or circumstances, and should only be relied upon
after consulting an appropriate expert, such as an attorney or
accountant.